What is the relevance of a probationary period?
You are entitled to terminate your employee if, during the probationary period, the employee fails to meet the standards required for the particular role for which the employee is recruited. In the mainland PRC, it is difficult to bring the employment relationship to an end and therefore, this approach is often used by employers.
During the probationary period, you may also set out relatively lower wages for your employees, with a lower limit of 80% of the lowest wage level on the same job or 80% of the wages agreed in the labour contract.
How long can the probationary period be?
In mainland China the maximum term for probation depends on the term of the labour contract. See details below:
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Can I rely on a probationary period which is longer than the maximum term above and which was agreed to by the employee?
No. The labour authority will request you to rectify the agreement. If the employee has performed any excess period of probation, you will be liable to pay the employee damages at the rate of the agreed monthly salary payable after the expiry of his or her probationary period for each excess month.
I have an indefinite contract with an employee and I originally asked the employee to take 3 months' probationary period. Can I extend the probationary period to 6 months (i.e., the maximum term) if the employee's performance is unsatisfactory upon the expiry of the originally agreed 3-months' probationary period?
No. The PRC law only allows an employer and an employee to enter into one probationary period and no extension is permitted.
If you feel unsatisfied with an employee's performance during his or her probationary period, you can terminate the employee before the expiry of the probationary period as long as you can prove that he or she does not fulfil your recruitment requirement(s). If you do not terminate the employee then you will have lost this opportunity.
Can I enter into a separate probation agreement with an employee?
You will be regarded as having entered into a fixed term contract with the employee. There will be no probationary period and your proposed term for probation will be the term of the contract.